Rising market interest rates create anxiety and pressure the stock market

The rise in long-term market interest rates has been going on for some time. The US ten-year Treasury yield rose seven basis points (one hundredth of a percentage point) to 5.33 percent. A substantial rise in one day and the highest level since 2002, according to the Bloomberg news agency.

- The problem is that the higher the interest rates become, the more the focus increases on what consequences this may have for government finances, the US national debt, and for the economy, companies and households, says Maria Landeborn.

Swedish interest rates also rose on Thursday. It affects how the banks set their interest rates on the fixed mortgages.

The rise in interest rates also puts pressure on share prices. The Stockholm Stock Exchange was down 0.6 percent at lunchtime. On most of the major European stock exchanges, the declines were sharper. The London stock exchange showed minus 1.8 percent and in Germany the decline was 1.2 percent.

- The rise in interest rates already started last summer. But then the stock market still rose thanks to stronger economic prospects. But the higher interest rates get, and when the focus increases on other issues such as the sustainability of the US national debt, for example. Then it starts to become more negative for the market, says Maria Landeborn.

She states, however, that the stock exchanges have not been affected too much negatively.

- The stock market is still surprisingly calm, considering what is happening in the interest rate market. And that depends a lot on the fact that we basically have a good economy, says Maria Landeborn.

- But you don't really know where the pain limit is. The more the interest rates rise, the more the risk of the market becoming more restless increases, she continues.

Interest rates also affect the krone, which has fallen against the dollar. At lunchtime, one dollar cost SEK 10.04. The weakest krone exchange rate in a year and a half.